Sourcing Components for the Automotive Industry

Despite the power electronics industry returning almost to normal after a few years of disruptions from Brexit, Covid and raw material shortages, the automotive market is still putting a strain on the component industry. Growth of electric vehicles and charging infrastructure is continuing to increase demand and restrict supply of components.

The automotive industry has witnessed a significant transformation over the past few decades, driven by technological advancements and the increasing integration of electronic components in vehicles. From basic electrical systems to sophisticated infotainment, navigation and autonomous driving systems, the demand for high-quality electronic components in the automotive sector is at an all-time high. Sourcing these components effectively is crucial for automotive manufacturers to ensure reliability, safety, and innovation. This article delves into the key aspects of sourcing electronic components for the automotive industry.

Sourcing Components for the Automotive Industry

Factors affecting supply Heatsink

The largest barrier to automotive IC availability is the number of standards and requirements each component and manufacturer must meet to ensure the required quality. Consumer grade components do not suit harsh environments and driving conditions, even for charging station infrastructure, safety factors and power handling need to be considered.

OEMs often require relevant industry standards such as AEC-Q100 for specifying component level testing and requirements ISO 26262 for vehicle electrical systems functional safety ratings and process management standards such as IATF 16949 for setting quality control management for manufacturing processes.

Supply challenges and ways to build resilience

Buyers face multiple sourcing challenges when buying automotive components, such as stock shortages, part obsolescence and reduced manufacturing priorities. Buyers can improve their supply chain resilience by partnering with a distributor who is able to maintain supply and mitigate supply issues where possible.

• Partner with a distributor that can buy in the quantity of components and to the industry standards required
• Work with the distributor to find ways to meet your desired coverage with flexible purchasing solutions. Having the components in stock will ease supply chain issues and help meet unexpected demand
• Liaise with distributors on achievable delivery drops, ensure you order far enough in advance to keep stock on the shelves
• Have an idea in mind of a second source, in case you need to explore more buying avenues due to supplier issues

Key considerations for sourcing

• Quality and reliability: a paramount factor to consider, components must withstand extreme temperatures, vibrations and other harsh environmental conditions. Automotive grade components adhere to stringent standards such as ISO/TS 16949, AEC-Q100 for integrated circuits and AEC-Q200 for passive components.
• Supplier selection: assessing the supplier’s track record of production capacity, financial stability and compliance with industry standards are three of the key factors to consider when selecting a supplier. Long-term partners can offer stability and ensure a consistent supply of high-quality components.
• Supply chain management: effective supply chain management helps avoid disruptions and ensures timely delivery of components. Forecasting demand accurately, maintaining adequate inventory levels and having a contingency plan all play an important role.
• Cost management: cost remains a significant factor for buyers, manufacturers must balance the need for high-quality components with cost-efficiency. This involves negotiating favourable terms with suppliers, exploring bulk purchasing options and considering alternative suppliers without compromising on quality.

Outlook for automotive components in 2024-2025

Lead times for automotive components are continuing to improve as demand for devices lessens and pre-pandemic restrictions revert. Most semiconductor manufacturing executives are optimistic about component shortages and believe shortages will improve by the end of 2024 with normal supply of ICs available towards the end of the year.

The increasing demand of electric powertrains and charging infrastructure promises increased component demand and as always it will be a battle for manufacturers to manage the level of demand with production schedules and delivery dates. The automotive semiconductor market has witnessed remarkable growth rate (CAGR) of 12.1% and the market is set for expansion. The main driving factor of this is the demand of Electric Vehicles and hybrid vehicles equipped with advanced driver assistance systems for safety and autonomous driving capabilities which heavily rely on semiconductors.

Emerging trends in automotive electronics

1. Electrification: the shift towards electric vehicles (EVs) is driving demand for specialised components such as battery management systems, power electronics and charging infrastructure. Sourcing these components requires collaboration with suppliers who specialise in EV technologies and can provide innovative solutions.
2. Autonomous driving: autonomous vehicles rely heavily on advanced electronic systems, including sensors, LiDAR, radar, and artificial intelligence 9AI) processors. Sourcing these high-tech components involves working with cutting-edge technology providers and ensuring that the components meet safety and performance standards.
3. Connectivity and IoT: the integration of Internet of Things (IoT) in vehicles enhances connectivity and enables features such as remote diagnostics, over the air updates and vehicle-to-everything (V2X) communication. Sourcing components for connected vehicles requires a focus on cybersecurity and data privacy, ensuring that the components are secure and compliant with regulatory requirements.

Challenges sourcing electronic components

1. Component shortages: due to the global demand of power electronic components in everyday applications, not just within the automotive industry, manufacturers need to diversify their supplier base and consider strategies stockpiling to mitigate the impact of such shortages on their large-scale roll out.
2. Rapid technology advancements: fast pace technological advancements can render certain components obsolete quickly. Staying ahead of the curve involved continuous research and development and maintaining close relationships with suppliers to access the latest technologies.
3. Regulatory compliance: stringent regulatory requirements related to safety, emissions and environmental impact are heavily affecting the automotive industry. Sourcing components that comply with these regulations is essential to avoid potential recalls and production delays.

Sourcing electronic components for the automotive industry is a complex and multifaceted process that requires careful consideration of quality, reliability, cost and emerging trends. By focusing on strategic supplier relationships, effective supply chain management and leveraging advanced technologies, automotive manufacturers can navigate the challenges and capitalise on the opportunities in this dynamic market. As the industry continues to evolve, staying adaptable and forward-thinking will be key to successful sourcing in the automotive electronics sector.

GD Rectifiers offers a wide range of power electronic components and builds designed for automotive applications such as capacitors, integrated circuits, fuses, ignition IGBTs, schottky diodes, discrete thyristors, automotive qualified MOSFETs and heatsinks. Our comprehensive range of advanced semiconductors includes silicon and wide band gap solutions in discrete and multi-chip module forms.

Discover the power electronic components designed for the automotive industry available at GD Rectifiers here with a large range of automotive products from industry-leading manufacturers such as IXYS, Eaton Bussmann and Semikron.

For further information on GD Rectifiers’ range of automotive products, please call our sales team on 01444 243 452 or email [email protected].